"Unless there is a clear decision to move the existing operators to a revenue-sharing regime (from a present fixed quarterly licence fee payment structure), the industry will get aborted," Kumar Mangalam Birla, chairman of the Aditya Birla group of companies, told reporters.

The Aditya Birla group owns 51 percent equity in mobile phone service company, Birla AT&T Communications Ltd, a joint venture with AT&T Corp. "If it doesn't change, the scenario is very bleak. Definitely it would amount to firms shutting down operations," he added.

Private telecom firms are close to bankruptcy, hit hard by low subscriber growth, falling usage and a reluctance of banks to finance their operations. They owe the government around $600 million in unpaid licence fees, and have been asking for the existing licence fee structureto be changed to a system in which licence fee payments are determined by the amount of revenue earned by operators.

The government has allowed revenue-sharing for new entrants into the sector, and has referred the issue of allowing existing players to move to this formula to the Attorney General of India.

"Most of us made a mistake in overestimating the size of the market and bidding very aggressively. Lot of things happened that were beyond our control. The economy was in a slump," Birla said.

PTI adds from Delhi: Union communications minister Jagmohan has said government was ready for an out-of-court settlement on the various disputes between telecom equipment manufacturers and department of telecom (DoT).

"We are ready for an out-of-court settlement for removing the atmosphere of mistrust that exist between manufacturers and DoT," Jagmohan said at a workshop on procurement of material organised by DoT here.

The minister was responding to telecom equipment manufacturers association of India(TEMA), President, Ashok Kanodia's suggestion that DoT should resolve all disputes at the earliest to create a good working relationship between the two.

Kanodia said there are at least 100 court cases between various telecom equipment manufacturers and DoT relating to encashment of performance bank guarantees and encashment of advances by the latter.

Tema president suggested out-of-court settlements to remove the atmosphere of mistrust that had been created between the parties during the last two years. The minister said both equipment manufacturers and DoT should see themselves as partners for the benefit of the telecom sector. Kanodia said that in 80 per cent of the cases between equipment manufacturers and DoT, an out-of-court settlement can be found without much difficulty.